Issuu

MALLORY & NATSIS LLP

MICHAEL R. FARRELL (BAR NO. 173831)

E-Mail: mfarrell@allenmatkins.com

SCOTT J. LEIPZIG (BAR NO. 192005)

E-Mail: sleipzig@allenmatkins.com

TIM C. HSU (BAR NO. 279208)

E-Mail: thsu@allenmatkins.com

865 South Figueroa Street, Suite 2800

Los Angeles, California 90017-2543

Phone: (213) 622-5555

Fax: (213) 620-8816

COHEN LAW GROUP, APC

MARC COHEN (BAR NO. 262707) 541 S. SPRING STREET, SUITE 1208

LOS ANGELES, CA 90013

EMAIL: MARC@CLGAPC.COM

PHONE: (213) 223-7707

FAX: (877) 334-3138

Attorneys for Defendants and Nominal Defendants

MAHENDER MAKHIJANI; CONTINUUM ANALYTICS, INC.; MOM AS INVESTOR; GROUP, LLC; MOM BS INVESTOR; GROUP, LLC; MOM CA INVESTOR GROUP, LLC; MOM CA MANAGER, LLC; MOM BS MANAGER, LLC; MOM AS MANAGER, LLC; LAGUNA HW, LLC; LAGUNA HI, LLC; SUNSET COVE VILLAS, LLC; RETREAT AT LAGUNA VILLAS, LLC; DUPLEX AT SLEEPY HOLLOW, LLC; HOTEL LAGUNA, LLC MOM AS INVESTCO, LLC; MOM BS INVESTCO, LLC; and MOM CA INVESTCO, LLC

SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF ORANGE

MOHAMMAD HONARKAR and 4G WIRELESS, INC., individually and on behalf of MOM AS INVESTCO, LLC, MOM BS INVESTCO, LLC, and MOM CA INVESTCO, LLC, Plaintiffs, vs.

MAHENDER MAKHIJANI; CONTINUUM ANALYTICS, INC.; MOM AS INVESTOR GROUP, LLC; MOM BS INVESTOR GROUP, LLC; MOM CA INVESTOR GROUP, LLC; MOM CA MANAGER, LLC; MOM BS MANAGER, LLC; MOM AS MANAGER, LLC; LAGUNA HW, LLC; LAGUNA HI, LLC; SUNSET COVE

Case No. 30-2023-01323759-CU-OR-CJC

ASSIGNED FOR ALL PURPOSES TO Judge Bradley Erdosi, Dept. C-27

Related Case No. 30-2023-01322886-CU-OR-CJC

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PETITIONERS’ PETITION TO VACATE PARTIAL FINAL ARBITRATION AWARD

Date: December 22, 2025 Time: 2:00 p.m. Dept: C27

Reservation No.: 74590248

Action Filed: May 3, 2023

Trial Date: None

VILLAS, LLC; RETREAT AT LAGUNA VILLAS, LLC; DUPLEX AT SLEEPY HOLLOW, LLC; HOTEL LAGUNA, LLC; and DOES 1-100, inclusive, Defendants. and MOM AS INVESTCO, LLC, a Delaware limited liability company; MOM BS INVESTCO, LLC, a Delaware limited liability company; MOM CA INVESTCO, LLC, a Delaware limited liability company; and DOES 101-110, inclusive,,

Nominal Defendants.

MohammadHonarkar(“Honarkar”)ownedabusinessempirebuiltonhouseofcardsandsaddled with debt. This all came crashing down in 2021 when Honarkar found himself out of money and out of time, as he owed his ex-wife millions in payments and was further facing imminent foreclosure. In June 2021, foreclosurewas scheduledtobeginin afewdays’time and Honarkarwas thus indesperateneedof a financial lifeline as no lenders would extend $145 million in credit. It was at this time that Honarkar convinced Makhijani and investors to invest in his businesses, agreeing to contribute his assets to a joint venture so long as these investors could leverage their good credit and financial connections to refinance the defaulted loans. The investors did exactly that saving Honarkar from foreclosure and, in addition, contributed another $30 million in capital via cash and commitments and later infused more than $100 millioninadditional fundingtoprop upHonarkar’s highly-leveragedbusinesses.

This good deed was repaid in malice when Honarkar sought to re-trade on deal terms and ultimately resorted to litigation to rescind what he claimed was a deal induced by fraud. No such fraud exists but, following a highly irregular arbitration, Honarkar and his operating entity, 4G Wireless, Inc. (“4G,” and collectively, the “Honarkar Parties”) secured an absurd award allowing him to “rescind” the entire venture notwithstanding the substantial benefits he received and with no evidence he could ever repay the funds invested or put Honarkar back into the situation he was in before, facing imminent foreclosure.

Followingyearsoflitigation,theHonarkarPartiesnowhaveanarbitrationawardwhichtheyhope to leverage for unjustified relief. This award should be vacated in its entirety As explained herein, the entirearbitrationproceeding was tainted withunprecedentedprocedural irregularity,including therefusal tohearkeyevidence,intimidationofwitnessesandcounsel,andblatantbiaswhichhasnowresultedinan award not founded on facts but apparently crafted to achieve an agenda regardless of means. As it turns out,the Arbitrator’s decision may have been prompted by bias as he failed to disclose aprior relationship with Honarkar’s counsel, which failure mandates the award be vacated in its entirety. The Arbitrator further berated several key witnesses during the midst of their testimony to impact their testimony, including by telling certain witnesses on the stand that their testimony (which had not been completed) was “just not credible” andcallingonewitness a“liar”tohis face.

Not surprisingly, this all resulted in an one-sided “Partial Final Award” in Honarkar’s favor, grantingHonarkartheoptiontorescindall aspects ofthejoint venture -evenasitrelates to an initial term sheet - which relief was not only never sought in his pleadings, it had been expressly disavowed by Honarkar’s counsel. Indeed, the core of the dispute centered around claims of fraud, yet the Arbitrator relied almost exclusively on credibility, and not the language of the contracts, to allow wholesale rescission ignoringevidencetothecontrary This improperbehaviorbyapurported neutral trieroffact meritsvacaturonitsown,particularlywhenviewedinlightoftheprejudicialresultsreflectedintheruling, which go well beyond his authority and are founded upon the exclusion of evidence only after the Arbitratorfailed todisclosea critical relationship.

For the reasons stated herein, Petitioners Mahender Makhijani; Continuum Analytics, Inc. (“Continuum”); MOM AS Investor Group LLC; MOM BS Investor Group LLC; MOM CA Investor Group LLC; MOM AS Manager LLC; MOM BS Manager LLC; and MOM CA Manager LLC (collectively, “Petitioners”) request an order issue to vacate the Partial Final Award in its entirety as the Arbitrator (1) failed to provide adequate disclosures; (2) exceeded the scope of his powers; (3) refused to allow discovery into the Honarkar Parties’ financial records (despite Petitioners’ claim of financial mismanagement); and (4) exercised jurisdiction over Makhijani, who is not a party to any arbitration agreement that would bringhim underthis Arbitrator’s jurisdiction.

II. RELEVANT FACTUALBACKGROUND.

A. Honarkar’s Failing Enterprise.

In mid-2020 and early 2021, Honarkar desperately needed cash as his assets were locked in multiplereceivershipsbroughtaboutfirstbyhiscontentiousdivorceandlaterbecausehehaddefaultedon a$195millionloan. [DeclarationofMichaelFarrell(“FarrellDecl.”,Ex.12at3905.042-050.) Honarkar’s divorce wrapped up by way of an agreement to pay $17.5 million to his ex-wife, but his default on the significantloanremainedacriticalproblemashisthen-lender,DIGPFSSLBCPHoldingCompany,LLC (“DIG”), aggressively sought to foreclose on Honarkar’s assets. (Id., at Ex. 13.) Thus, in early 2021, Honarkarfound himselfindesperateneedoffinancingtothetuneof $144millionforDIG,another$17.5 million for his ex-wife, and many millions more to finance ongoing operations. (Id., Ex. 1, Hearing Tr., 6/25/24,at 283:13-284:5; Ex.14,at 2045.003.)

Againstthisbackground,Honarkarsoughtfinancingtohelpresolvehisissues andfailed.Buthe wasintroducedtoMakhijaniinearly2021asasourceofpotentialfunding. Makhijani’sgroupofinvestors quicklymadea$5.5millionloantoHonarkarononeofhisprojects.(Id.,Ex.15at5530.023.) Thereafter, following weeks of heavy negotiations, Honarkar and Continuum (acting for the investors) signed a binding Term Sheet on May 24, 2021 to form a joint venture (“Term Sheet”). As shown in the Term Sheet,thepartiesoriginallyagreedthatContinuumwouldberesponsibleforarrangingapproximately$140 million of refinancing, guaranteed by investors, to stave off foreclosure, and separately contribute up to $35millionin“cash equity”which amount ofcontributionwouldbereducedifitcostmoreto payoffthe DIG loan. (Id., Ex. 16.) In turn, the Term Sheet obligated Honarkar to contribute all of his assets into the joint ventureand entitledtheinvestors to receive anownershipinterest and rightsto distributions. (Id.)

Ultimately, Honarkar’s various assets were contributed into three separate joint venture entities (i.e., MOM CA, MOM AS, and MOM BS), formed through Operating Agreements. Given the scope of thejointventure,theseventureagreementswereheavilynegotiated. (See, e.g., id.,Exs.17–33; accord Ex. 6HearingTr.,7/5/24at2383:13-2384:18.)Thedefinitivefinaljointventureagreementswerefinalizedby the parties on June 8, 2021, and pursuant to the Operating Agreements, Honarkar was appointed as AdministrativeManager. (See id. Exs.54–56.)

B. HonarkarStoleJointVentureFunds and Caused Operational Chaos.

Following formation, the joint ventures were operated in accordance with the agreements. But HonarkarbreachedtheOperatingAgreementsbypocketingventurefundstopaypersonalexpenses,filing lawsuitsonbehalfofthejointventureentitieswithoutnoticeorapproval,signingagreementsonbehalfof the entities without approval, and opening shadow bank accounts to siphon funds without any written approval (just as he did to evade oversight of the two receivers). (Id., Exs. 34, 35.) This conduct led to Honarkar’s removal as Administrative Manager on March 29, 2023 pursuant to Section 9.1(c) of the Operating Agreements. (Id.) Despite this, Honarkar continued to hold himself out as Administrative Manager and attempted to cause as much chaos as possible. Indeed, on May 2, 2023, Honarkar and an entourage of agents and armed guards stormed Hotel Laguna and the 14 West hotel in the early morning hours. (See id.,Ex. 4, Hearing Tr.,6/28/24 at 1356:12-1370:10.) This led theHon. DavidJ. Hesseltineto issueatemporaryrestrainingorderandpreliminaryinjunction against Honarkar. (Id.,Ex. 57.)

The parties filed competing lawsuits, which were compelled to arbitration by this Court. In the arbitration, the Honarkar Parties claimed that Petitioners, along with Nano Banc, defrauded Honarkar as thePetitioners wereallegedlyrequiredtocontribute$30million but failed to doso. (Farrell Decl.,Ex. 40 ¶¶36, 48.) According to the Honarkar Parties, the Operating Agreements required the contribution of a full $30 million in cash. (Id.) Thus, notwithstanding that thePetitioners made a contribution byway of a $10 million cash infusion along with another $20 million provided through a loan from Nano Banc (the “Nano Loan”), the Honarkar Parties claimed they were entitled to damages and rescission as those contributions did not meet the requirements of the Operating Agreements. (Id. ¶51.) Based on this, and otherclaimsthatthePetitionersconvertedfundsandcommittedforcibleentry,theHonarkarPartiessought damages or,alternatively,“rescissionoftheMOM LLC Operating Agreements.” (Id.)

The final arbitration hearingtook place from June 24, 2024through July 12, 2024. (Farrell Decl. ¶2.) A Partial Final Award was issued on May 23, 2025 finding, among other things, that the Honarkar Parties had proved their claims for fraudulent inducement, breach of contract, and conversion. Based on those findings, the Partial Final Award awarded the Honarkar Parties the right to elect damages or rescissionafteranaccountingiscompleted,followedbya“final”awardwithadeterminationofdamages, includingpunitivedamages. ThePartialFinalAwardfurtherauthorizesrescissionofnotjusttheOperating Agreements,but also theoriginal bindingTerm Sheet whichtheHonarkarPartiesneverrequested.

III. THE AWARDSHOULDBE VACATED.

The court may vacate an award when (1) the arbitrator “exceeded” his powers and “the award cannot be corrected without affecting the merits of the decision upon the controversy submitted”; (2) the rightsofapartywere“substantiallyprejudicedbythearbitrators’refusal...tohearevidencematerialtothe controversy ”;(3)theawardwas“procuredbycorruption,fraudorotherunduemeans”;and(4)therights ofthepartywere“substantiallyprejudicedbymisconductofaneutralarbitrator.”(C.C.P.§1286.2;10Del C.§5714(a);9U.S.C.§ 10(a).) ThePartialFinalAwardshouldbevacatedherebecause:(1)theArbitrator failed to make required disclosures; (2) the Arbitrator exceeded his authority; (2) Petitioners were prejudiced by the Arbitrator’s refusal to hear key evidence; (3) the Award was procured through undue means; and(4)Petitioners wereprejudicedbytheArbitrator’s conduct.

A. TheArbitratorFailed to Disclosea Critical Prior Relationship With Counsel.

Our system of private arbitration rests upon the ability of parties to obtain prompt adjudication of issuesinafairandimpartialmanner. Accordingly,Californialawandtherulesofarbitrationbothimpose broaddisclosurerequirementstoensureimpartialityismaintained. Section1281.9oftheCaliforniaCode ofCivilProcedurerequires arbitratorstoaffirmativelydisclosenotjustpriororpendingmattersinvolving the parties or their counsel, but also “[a]ny professional or significant personal relationship the proposed neutral arbitrator … has or has had with any party to the arbitrator proceeding or lawyer for a party.” (C.C.P. § 1281.9(a)(6).) JAMS Rules likewise impose the same disclosure obligations specifying that “[t]he obligation of the Arbitrator…to make all required disclosures continues throughout the Arbitration process.” (JAMS Rule15(h)`)

This fundamental requirement is further detailed in the Ethical Standards for Neutral Arbitrators in Contractual Arbitration, Standard 7, which provides that “[a] proposed arbitrator or arbitrator must disclose all matters that could cause a person aware of the facts to reasonably entertain a doubt that the arbitrator would be able to be impartial, including, but not limited to … (9) [a]ny other professional relationshipnotalreadydisclosed…thatthearbitrator…hasorhashadwithapartyorlawyerforaparty[, and] … (15) [a]ny other matter that: (A) Might cause a person aware of the facts to reasonable entertain a doubt that the arbitrator would be able to be impartial….” (Standard 7(d) (emphasis added); see also, C.C.P. § 1281.9(a) [requiring disclosure of “all matters that could cause a person aware of the facts to reasonablyentertainadoubtthattheproposedneutralarbitratorwouldbeabletobeimpartial….”].) JAMS Arbitrator Ethics Guidelines similarly “strongly encourages Arbitrators to address ethical issues that may ariseintheircases as soon as anissuebecomes apparent….” (See JAMS ArbitratorGuidelines.)

Following the inexplicably hostile final hearing and issuance of a wholly one-sided ruling contradicted by evidence, Petitioners discovered that there exists a disconcerting prior undisclosed relationship between the Arbitrator and counsel for Honarkar. Specifically, Edward Susolik of Callahan andBlainerepresentedHonarkarinbothhisdivorceproceedings aswellasinaseparate(andstillpending) matter concerning the “Newport Crossings” property, a substantial asset of the joint venture formed betweenHonarkarandPetitioners. (FarrellDecl.Ex. 6,Hearing Tr.,7/5/24at2429:10-18; Leipzig Decl., Exs. C, D.) In that matter, Mr. Susolik and his firm jointly represented Honarkar and another venture

partner in connection with the acquisition of Newport Crossings, where it was alleged that Honarkar engaged a different attorney to defraud Honarkar’s venture partner and deprive him of the opportunity to purchasetheproperty. (Id.)

As it turns out, the Arbitrator had a pre-existing relationship with the Callahan and Blaine firm and, specifically, Mr. Susolik. The Arbitrator had presented with Mr. Susolik in seminars. Their relationship was such that both attorneys attended a private ceremony attended by the Arbitrator and his family,celebratingtheArbitrator’sappointmenttotheCaliforniaCourtofAppealin2012. (LeipzigDecl., Exs. A, B.) Notwithstanding this connection, and despite the repeated reference to Mr. Susolik and his firm in evidence, at no time did the Arbitrator ever disclose his relationship to Honarkar’s counsel from Callahan and Blaine. No such relationship was identified in the Arbitrator’s written disclosures, nor did theArbitratormake anymentionofsuch arelationship duringthe final hearing. (Id. Exs.E-I.)

This failure of disclosure is emblematic of the prejudicial bias experienced by Petitioners in this proceeding and likely caused or contributed to the entirely one-sided Partial Final Award 1 While it remainsunclearwhethertheArbitrator’srelationshiptoHonarkar’scounselactuallytaintedhisviews,the veryfactofthisfailureofdisclosureisdeeplytroublingandunderminesthelegitimacyoftheentirePartial Final Award. Indeed, disqualification of an arbitrator does not rest upon a showing of actual bias, as the mere appearance ofimpartialitygivesparties arighttochallengetheappointment. (Wechsler v. Superior Court (2014) 224 Cal.App.4th 384, 390 [“A party moving for disqualification need not show actual bias because the Legislature sought to guarantee not only fairness to individual litigants, but also to ensure publicconfidenceinthejudiciary,whichmaybeirreparablyharmedifacaseisallowedtoproceedbefore a judge who appears to be tainted. A party has the right to an objective decision maker and to a decision maker who appears to be fair and impartial.”]; Mt. Holyoke Homes, L.P. v. Jeffer Mangels Butler &

1 Theheart ofHonarkar’s claim of fraud rests entirelyon avowedlack ofknowledgeconcerningthe Nano Loan,as thesignedagreements unequivocallyallowPetitioners’ contribution tobemadein ways otherthan cash. Despitethis,theArbitrator gaveno weight to Honarkar’s ownemails andtext, referencing theamount ofloans andthus demonstratinghis awareness oftheNano Loan. Rather, thesefacts weresummarilydismissedas “not persuasive,” deferringtoHonarkar’s self-serving testimony,providedusing acheat-sheet onthestand. (Farrell Decl.,Ex.50 at 23-24.) When called out forthis evidentiary violation,Petitioners’objections wereignored. Regardless, suchthin support fortheultimate findings onlyservestounderscoretheirregularnatureoftheproceedings.

Mitchell, LLP (2013) 219 Cal.4th 1299, 1310-1313 [finding it error to deny petition to vacate where “an objectiveobserverawareofthefacts couldreasonably[]entertain such adoubt”regarding impartiality].)

On its face, the Arbitrator’s close relationship to Honarkar’s counsel would objectively cause a reasonablepersontodoubthisimpartialityinthecase. Honarkar,byhisownadmissions,builthisbusiness in Orange County and has strong ties to the local community. His counsel at Callahan and Blaine are friends with the Arbitrator, having not just servedtogether on speaking panels, but also having attended a close-gathering to celebrate the Arbitrator’s elevation to the Court of Appeals. This relation has existed for over 10 years and it does not require any leap of logic to surmise the Arbitrator’s cozy relations to counsel would have impacted his impartiality and resulted in a biased proceeding. Indeed, had it been disclosed, Petitioners would have objected to the Arbitrator’s appointment. (Leipzig Decl. ¶ 18.) Moreover,the Arbitratoralsosuggested,during anoffthe record discussion, that he knewthe aunt ofone of Honarkar’s witnesses, DanNiazi, andmayhaveattended high school with her. (Id. ¶17.)

Petitioners also had no reasonable way to discover this pre-existing relationship. Rather, the disclosure obligation, naturally, rests squarely on the Arbitrator. Yet this Arbitrator made no such disclosures and this blatant failure to make a critical disclosure mandates vacation of the Partial Final Award as even the appearance of a conflict must be disclosed 2 (C.C.P. § 1286.2(a)(2), (6).) Any other result leaves Petitioners with no recourse as they never had any opportunity to object to the Arbitrator’s undisclosed relations and the confirmation of such an award tainted with nondisclosure must be vacated. (Ovitz v. Schulman (2005) 133 Cal.App.4th 830, 844-845 [“On its face, the statute leaves no room for discretion. If astatutorygroundforvacatingtheawardexists, thetrial court mustvacatethe award.”])

B. TheArbitratorExceeded His Powers.

When an arbitrator exceeds his authority under the parties’ arbitration agreement, vacatur is mandatory: “[T]he court shall vacate the award if the court determines the arbitrator[] exceeded [his] powersandtheawardcannotbecorrectedwithoutaffectingthemeritsofthedecisionuponthecontroversy submitted.” (C.C.P. § 1286.2(a)(4)[emphasis added].) “Thepowers ofanarbitratorderivefrom,and are

2 Therules were consistently followed whenit benefited Honarkar,includingimposingprocedural hurdles onseparatebankruptcy counsel fortheJVbeforethey wereeven heard. Therules must be equallyapplied,especially fordisclosureobligations foundationaltoanimpartial proceeding.

limitedby,theagreementtoarbitrate.” (Advanced Micro Devices, Inc. v. Intel Corp. (1994)9Cal.4th362, 375(Advanced Micro).)

1. TheArbitratorExceededHis AuthoritybyRescindingtheTerm Sheet.

The Arbitrator exceeded the scope of his authority by going beyond even what the Honarkar Parties requested and providing rescission of the Term Sheet. (See Ex. 48, § N(1).) This overreach of authorityis egregious as the arbitrationprovision incorporated JAMS’ “expeditedarbitrationrules ” (See Farrell Decl., Exs 54–56, §19.10.) The Arbitrator’s powers were thus limited tothose authorized by the JAMS Rules. (Emerald Aero, LLC v. Kaplan (2017) 9 Cal.App.5th 1125, 1140; see Advanced Micro, supra, 9Cal.4that367; see also, JAMSRule9(a)[“noclaim,remedy,counterclaimoraffirmativedefense will be consideredbytheArbitratorinthe absenceofsuch priornoticetotheotherParties”].)

Here, Petitioners did not have “prior notice” that the Term Sheet would be rescinded under Rule 9(a). In his Demand, Honarkar only sought “rescission of the MOM LLC Operating Agreements.” (Farrell Decl., Ex. 40 at ¶68, Prayer ¶2.) Indeed, in a motion hearing a few months prior to the final hearing, Honarkar’s counsel confirmed that he sought rescission only as to the operating agreements and statedthatiftheywererescinded“[t]henIbelievethetermsheetwouldbethebindingcontractthatwasin place.” (Farrell Decl., Ex. 42 Hearing. Tr., 1/2/24 at 28:14-22.) Also, in their pre-hearing brief, the Honarkar Parties claimed they were “entitled to recission of the joint venture agreements (the Operating Agreements fortheMOM LLCs,asamended,andtheAssetContributionAgreement),”but nottheTerm Sheet. (Farrell Decl., Ex. 43, Pre-Hearing Br at 49.) It was not until their Post-Hearing brief where the Honarkar Parties claimed for the first time that they were entitled to rescission of “the joint venture agreements (the Operating Agreements of the MOM Investco LLCs,…Asset Contribution Agreement…and the May 24, 2021 Term Sheet between the parties).” (Farrell Decl., Ex. 44 at 61.)

GiventhatPetitionersdidnothavepriornoticeandnoopportunitytorespond,therescissionofthe TermSheetisnotaremedyproperlysubmittedpursuanttorule9(a)oftheJAMSRulesandtheArbitrator had no authority to award such relief.3 Pacific Crown Distributors v. Brotherhood of Teamsters (1986)

3 When this was raisedto theArbitrator,his responsewas to ignoretheprocedural error becausethe request torescind theTermSheet was mentionedin theHonarkarParties’Post-Hearing briefs, without any regard totheprejudicetoPetitioners. (SeeFarrell Decl., Ex. 41 at 2.)

183 Cal.App.3d 1138, 1146 (“By asserting the [“right to work” provision] for the first time in its posthearing brief, [employee]intentionally and fraudulently deprived [employer] of its opportunity to present evidenceinarbitration concerning,”theinapplicabilityofthat provision.”).

Critically, the terms of the Term Sheet demonstrate the magnitude of overreach here warranting vacatur. As Honarkar’s core claim is that he was defrauded because Petitioners did not contribute $30 million in cash, he did not seek rescission of the Term Sheet because he knew it does not include such a requirement. (Farrell Decl., Ex. 16.) Rather, the Term Sheet only requires a minimal initial contribution of $2 million, which was indisputably provided. While the Arbitrator seemingly understood this, he nevertheless granted rescission of the Term Sheet as he likely understood that is the only way Honarkar could show damages essential to his claims; as the bulk of the claimed damages rests entirely on alleged lost valueassociatedwith Honarkar’slossofmanagement controloncetheventurewas formed. Thisis a blatantinstanceofoverreachengineeredtoachievetheultimategoaltobenefittheHonarkarParties,which is contrarytolawand undermines thelegitimacyand validity oftheentire proceeding

2. TheArbitratorExceededtheScopeby AwardingPunitiveDamages.

“Thescopeofanarbitrator’sauthorityisnotsobroadastoincludeanawardofremediesexpressly forbiddenbythearbitrationagreementorsubmission.”(Gueyffier v. Ann Summers, Ltd.(2008)43Cal.4th 1179,1185(cleanedup).) Ifalimitationonreliefissetout “explicitlyandunambiguously”intheparties’ agreement, andthearbitratorexceedshis authorityinawarding reliefbeyondthelimitation,thenthecourt is empoweredto vacateor correct the award. (See Advanced Micro, supra, 9Cal.4th at 383.)

TheAwardprovidesforpunitivedamages. (See Ex.50at43.) Butsection19.10oftheOperating Agreementsexpresslyprohibitedtheawardofpunitivedamages. (See Exs.54–56§19.10[“Providedthat no party shall be liable for consequential, punitive, or special damages.”].) The Arbitrator thus “disregarded specific provisions of the plain text...Such an award is irrational.” (Aspic Engineering & Constr. Co. v. ECC Centcom Constructors, LLC (9th Cir.2019)913F.3d1162,1168.)

When challenged on this by way of a request for correction, the Arbitrator denied the request but provided little grounds for the denial, commenting that the argument “may have been waived,” or the provision is “likely unlawful” citing to Civil Code § 1668’s general prohibition against excepting parties from responsibility for their intentional torts. (Farrell Decl., Ex. 41, Correction at 2.) However, contrary

to this uncertain statement, punitive damages waivers in arbitration provisions are enforceable. (Mastrobuono v. Shearson Lehman Hutton, Inc. (1995) 514 U.S. 52, 56-57 [“[I]f the contract says ‘no punitive damages,’ that is the end of the matter, for courts are bound to interpret contracts in accordance withtheexpressedintentionsoftheparties eveniftheeffectofthoseintentionsistolimitarbitration.”].) Thepunitivedamageswaiverhereismerelya“remedylimitation”thatdoesnotgoesso farasto “exempt [adefendant]fromresponsibility,”(James River Holdings Corp. v. Anton & Chia LLP (C.D.Cal.Jan. 17, 2014)2014WL12696367,at*7). Thus,Civ.Code§ 1668hasnoapplicationhere,andnoneofthe Tunkl factors weigh in favor of finding unenforceability. (Tunkl v. Regents of Univ. of Cal. (1963) 60 Cal. 2d 92.) Further,nothingPetitionersdidcouldamounttoawaiver. (J. Alexander Secs., Inc. v. Mendez (1993) 17 Cal.App.4th 1083, 1093–94 [holding a waiver requires a “voluntary and intentional relinquishment of aknownright”].) Thus,thepunitivedamageslimitationappliesandtheArbitrator’sissuanceofthisrelief beyond the plain limitations of his authority warrants vacating the Award. (See Cal. Fac. Association v. Sup. Ct. (1998)63Cal.App.4th935,953[“[I]tisdifficulttoseehowtheviolationofanexpressandexplicit restriction on the arbitrator’s powers could be considered ‘rationally related’ to a plausible interpretation ofthe agreement’].)

C. TheArbitratorRefused toHear Relevant

Evidence.

An arbitration award must also be vacated as the arbitrator has refused to hear material evidence, andPetitionershavebeensubstantiallyprejudiced. (C.C.P.§ 1286.2(a)(5); Burlage v. Sup. Ct. (2009)178 Cal.App.4th524,529.) Petitionersneednotprovethatthearbitratorwouldhavereachedadifferentresult had he heard the withheld evidence. (Hall v. Sup. Ct. (1993) 18 Cal.App.4th 427, 438-39). Rather, it is sufficient“thatthearbitratormightwellhavemadeadifferentawardhadtheevidencebeenallowed.” (Id.)

1. TheArbitratorRefusedto OrdertheProduction of4G’s Books.

The Arbitrator ruled against Petitioners’ request that the Honarkar Parties be ordered to produce 4G’s books and records. Petitioners requested that the Honarkar Parties “be ordered to produce complete Quickbooks data for 4G,” but the Arbitrator denied the request. (Farrell Decl., Ex. 56 at p. 2.) The Quickbooks files were particularly important to Petitioner’s claims. The evidence showed that Honarkar thenaskedtenantstopayrenttohimdirectly. (See Exs.36–39,FarrellDecl.,Ex.5,HearingTr.,7/1/24at 1401:17-1402:18; see also FarrellDecl.,Ex.1,HearingTr.,6/25/24at423:17;425:10-426:25.) Honarkar

also admitted tenants paid him rent directly into the 4G bank account. (Farrell Decl., Ex. 1, Hearing Tr., 6/25/24 at 452:4-453:4.) That money was then transferred to Honarkar’s secret bank accounts. (Id. at 454:25-455:10; Ex. 45.) Petitioners’ expert, Joe Pohlot, testified that approximately $5,972,882 was diverted, without the benefit of 4G’s Quickbooks. (See Ex. 46 at 10; see also Ex. 47 at 2; Farrell Decl., Ex. 8, Hearing Tr., 7/10/24 at 3346:13-3348:21.) Petitioners also asserted that Honarkar had breached representationsandwarrantiesintheOperatingAgreementbymisstatinghisfinancialcondition. (Id.,Ex. 48at33-34.) TheQuickbookfileswouldhaverevealedtheextentofHonarkar’swrongdoing,andwithout such documents, Petitioners’ rights weresubstantially prejudiced.

2. TheArbitrator Ignored Unethical Conduct by Honarkar’s Counsel.

The Honarkar Parties’ core contention is that they were not informed that $20 million of Petitioners’ initial contribution would be sourced from a loan from Nano Banc. Thus, what Honarkar knew or didn’t know about the loan is critical. On this point, Nano Banc’s then-Chief Interim Officer (Anthony Gressak) was called to testify, but his ability to provide testimony was directly impacted as the HonarkarParties’counsel failedtodiscloseaprior attorney-client relationshipwith Mr. Gressak.

On the stand, Honarkar’s counsel, Aaron May, cross-examined Gressak for four hours. (Farrell Decl., Ex. 8, Hearing Tr., 7/10/24 at 3346:13-3348:21.) Two days later, Gressak’s counsel sent correspondence reporting: Gressak consulted May while this action was pending to retain May to represent him in a dispute regarding his departure from Nano Banc. (See id.) Gressak alleges that he disclosed confidential information about Nano Banc to May during that consultation, which he believed was privileged (See id.) Gressak’s counsel asserts that such information was used against him by May during cross-examination. (See id.) Gressak cited examples. (See id.) Gressak did not know May represented Honarkar, did not waive the privilege, or otherwise consent to May using the confidential information against him orany otherparties. (See id.)

May’s use of purportedly privileged information he learned from Gressak had an unmistakable prejudicial effect on Gressak’s testimony. For instance, May’s questioning led Gressak to assert that certain responses would impermissibly require him to disclose Confidential Supervisory Information (“CSI”) under 12 CFR §261.20(b)(1). Gressak contends he was confused while testifying as he did not know how May knew of such confidential information. (See id.) Indeed, Gressak’s demeanor while

testifying changed when ambushed by May’s use of confidential information. (Farrell Decl., Ex. 8, Hearing Tr., 7/10/24 at 3364:18-3370:23; id., Ex. 9, Hearing Tr., 7/11/24 at 3433:1-3438:25; 3541:243557:19; id.,Ex.10,HearingTr.,7/12/24at3617:5-3634:21.) Gressakbelieves theArbitratorinterpreted his confusionas evasiveness. (See Farrell Decl.,Ex. 11,p.2.)

Knowing that this issue impugned Gressak’s credibility, Nano Banc and Petitioners immediately requestedtheappointmentofanindependentarbitratortoconductdiscoverytoassessthescopeandimpact ofthedisclosureofpotentiallyprivilegedinformation. ButthisrequestwasflatlydeniedbytheArbitrator who indicated “Respondents have not shown any factual or legal basis for the Request,” without any explanation why May’s behavior and the impact on Gressak should be ignored. (Farrell Decl., Ex. 49.)

This led the Arbitrator ultimately determining that Gressak was “just not credible,” discrediting his testimony in its entirety. (Id., Ex. 50 at 18.) Given Gressak’s contentions (and the Arbitrator’s hostile behavioras described below),hehadeveryreason to be confused onthestand which reflected negatively on his credibility This impact on key testimony going to the very heart of the dispute is yet another example of the Arbitrator’s refusal to allow anyone other than the Honarkar Parties to have a fair shot at presentingevidence,and suchirregularity requires vacatur.

D. TheAward Was ProcuredThrough UndueMeans.

Vacaturisappropriateifthe“awardwasprocuredbycorruption,fraud,orunduemeans.” (C.C.P. §1286.2(a).) This applies both to issues perpetrated by the arbitrator or by a party. (Pacific Crown Distributors v. Brotherhood of Teamsters & Auto Truck Drivers, Loc. 70 (1986) 183 Cal.App.3d 1138, 1147.) “Undue means” consists of conduct that is “immoral, if not illegal something wrong, according to the standards of morals which the law enforces.” (Maaso v. Signer (2012) 203 Cal.App.4th 362, 372375; see National Cas. Co. v. First State Ins. Grp. (1stCir.2005)430F.3d492,499.) Tovacateanaward because of undue means, Petitioners must show the undue means (i) were not discoverable before the award was made and (ii) caused the award to be given. (A.G. Edwards & Sons, Inc. v. McCollough (9th Cir.1992)967 F2d 1401,1403-1404.)

It should go without saying but witness tampering constitutes undue means. (See NuVasive, Inc. v. Absolute Med., LLC (11th Cir. 2023) 71 F.4th 861, 866, 875-78 (NuVasive).) This is exactly what occurred here as evidenced by May and the Arbitrator’s conduct concerning Gressak. May’s use of

information (without consent) is the textbook definition of “undue means,” as it violates the rulesofProfessionalConduct. WhileGressakdidnotretainMayascounsel,itisshockingthatMaynever informed Gressak of his concurrent representation of the Honarkar Parties and that he never thought it relevant to disclose to the parties in arbitration. By statute, May is required to “maintain inviolate the confidence, and at everyperil tohimselforherselfto preservethesecrets, ofhis or her client.” (Cal. Bus. & Prof. Code § 6068(e)(1); Cal. R. Prof. Conduct R. 1.1.8(b).) But May did not just fail to maintain confidence, he actively used information relayed to him by Gressak to advocate for other clients, the Honarkar Parties. At a minimum, Gressak’s allegations create the appearance of impropriety and has resulted in irreparable prejudice, precisely what the rules of professional conduct are designed to protect against. (See Kennedy v. Eldridge (2011)201Cal.App 4th1197,1204[“Theparamount concernmustbe to preservepublictrust inthescrupulous administrationofjusticeand theintegrity ofthebar.”].)

In addition, Honarkar also brought a notepad to the witness stand and consulted it throughout his testimony. (Farrell Decl , Ex. 2, Hearing Tr. 6/26/24 at 691:4-16 [“[T]he witness, I believe, is looking at notesonhispad….”];Ex.3,HearingTr.6/27/24at835:22-842:22[Arbitratorholdingthat “thenotesthat were being used shall be produced, if at all possible, and the further order is going to be that I’m going to allow opposing counsel to voir dire him about those notes if he so desires”]; 1032:1-7; see Ex. 51 [purported copy of his notes].) Influencing a witness’s testimony through the use of notes is further grounds forvacatur. (See NuVasive, 71 F.4that 878–79.)

E. Petitioners WereAlso Prejudiced by theArbitrator’s Misconduct.

Vacaturisalsoproperwhen“[t]herightsofthepartyweresubstantiallyprejudicedbymisconduct of a neutral arbitrator.” (C.C.P. § 1286.2(a)(3).) “For the claimed departure from the usual procedure to amount tomisconduct ofthe arbitrators sufficient to vacate the award, it must be shown that it prejudiced the rights of one of the parties.” (Turner v. Cox (1961) 196 Cal.App.2d 596, 603; Moncharsh v. Heily & Blase (1992)3Cal.4th 1,13.

Here, the Arbitrator’s misconduct permeated every aspect of the arbitration proceeding. His behaviorthroughouttheproceedings,takeninfull,amountstoseriousmisconductwhichrequiresvacatur. As examples,theArbitratorfellasleep(LeipzigDecl.¶4);andberatedwitnessesduringthemidstoftheir testimony. (Id., ¶¶7-13Farrell Decl., Ex. 5 Hearing Tr., 7/1/24, at 1571:12-1572:19 [while witness was

testifying, “I’m judging the credibility of this witness. He's not looking super credible right now.”]; 1575:2-1576:18[“Iwassuggestingthathisdemeanoris,tome,givingtheappearanceofuntruthfulness.”];

Ex. 7, Hearing Tr., 7/8/24, at 2676-1-3 [“It looks to me like you’re playing games here This is not a game.”].) Healsoheldhearingsattimeswhenheknewoneoftheattorneystothecasewasonareligious pilgrimagein Israel. (LeipzigDecl. ¶26.) TheArbitrator alsorepeatedly beratedcounsel,goingso faras toshoutatcounselto“quitwhining.”(Ex.1,HearingTr.,6/25/24,at258:4-15;Ex.4,HearingTr.,6/28/24, at 1162:12-17; Ex.3, HearingTr.6/27/24,at 890:1-891:3.)

All of this had obvious negative effects on witnesses favorable to Petitioners, including a key witness, Mr. Kluchin, who was not inclined to finish testifying because the Arbitrator berated him on the stand. (LeipzigDecl.¶8.) Thiswasegregiousbehaviorandasidebarwasheld. ButwhiletheArbitrator seemingly concededtheimproprietyofhis behavior,hedoubleddownusingthreats tointimidate counsel intosubmission. (Id.) Dayslater,theArbitratordidthesametoyet anothercrucial witness,Mr.Gressak, where he went so far as to tell Mr. Gressak in raised tone that he was playing “games,” and called Mr. Gressak a “straight-out liar about everything across the board.” When counsel objected to this unbecoming behavior, the only response was “but this is my rodeo.” While the Arbitrator may fashion himself a cowboy with unfettered authority, that is not the case as his gross misconduct has irrevocably poisoned theproceedings andthe extreme and prejudicial outcomehere cries out forvacatur.

IV. THE ARBITRATORDIDNOT HAVE JURISDICTIONOVERMAKHIJANI.

The Partial Final Award must also be vacated as it relates to Makhijani as the Arbitrator had no jurisdiction to determine claims against a non-party to the arbitration agreement. Makhijani did not sign the Operating Agreements that contained the arbitration provisions. Rather, he signed the Term Sheet as an “Authorized Signatory” of Continuum Analytics. (See Farrell Decl., Ex. 16.) In deciding a Motion to Compel Arbitration, the Court held that the issue of arbitrability was “an issue for the arbitrator to decide.” (Farrell Decl., Ex. 52 at ¶ 3.)

The“righttotrialbyjuryisabasicandfundamentalpartofoursystemofjurisprudence. Assuch, it should be zealously guarded by the courts. In case of doubt, therefore, the issue should be resolved in favor of preserving a litigant’s right to trial by jury.” (Byram v. Sup. Ct. (1977) 74 Cal.App.3d 648, 654 [citations omitted]; Benasra v. Marciano (2001) 92 Cal.App.4th 987, 990 (policy in favor of arbitration

does not extend to those who did not sign the arbitration agreement.) The right to litigate in court is a “substantial right and one not likely to be deemed waived.” (Marsh v. Williams (1994) 23 Cal.App.4th 250,254(cleanedup).) Rather,thepartiesmust unequivocally agreetoarbitrate. (Id. (citationsomitted).)

Here,Makhijaniisnotathird-partybeneficiaryoftheOperatingAgreementsandcannotbebound. “[A]third-partybeneficiaryissomeonewhomayenforceacontractbecausethecontractismadeexpressly forhis benefit ” (Jensen v. U-Haul Co. of California (2017)18 Cal.App.5th295,301.) Therearealso no provisions in any of the agreements that identify Makhijani as a beneficiary, nor any evidence that he obtainedanybenefit. “[T]hecaselawinfactrequiresthatthethirdparty claim benefitsorrightsunderthe contractbeforeheorshewillbeboundtoarbitrate”whichMakhijanihasnotdone. (McArthur v. McArthur (2014) 224 Cal.App.4th 651, 662-63 [emphasis added]; see also Young Seok Suh v. Sup. Ct. (2010) 181 Cal.App.4th 1504, 1513 (holding plaintiffs not bound to arbitrate as third-party beneficiaries of contract wheretherewas noevidencetheplaintiffs benefitted); Benasra, supra,92Cal.App.4that 991.)

Moreover, there is no “preexisting relationship” between Makhijani and any party, such that it wouldbe“equitable”toforcehimtoarbitrate. Theonly “preexistingrelationship”atissueis Makhijani’s role at Continuum Analytics. That is insufficient. (Benasra, supra, 92 Cal.App.4th at 990-93 (finding a corporate representative signing a license agreement did not make him a party); see also Epitech, Inc. v. Kann (2012)204Cal.App.4th1365,1371-1372.)

V. THE AWARDSHOULDBE CORRECTED.

The court may correct an award if it determines: (a) that there was an evident miscalculation or misidentification; (b) that the award was imperfect as to form; or (c) that the arbitrators exceeded their powers, and the award may be corrected without affecting the merits of the decision. (C.C.P. § 1286.6.) If the court declines to vacate any portion of the award, Petitioners respectfully request that the Award insteadbecorrectedtoremovetheawardofpunitivedamagesandtheawardofrescindingtheTermSheet.

Fortheabove reasons,theAwardmust bevacated,oralternatively, corrected.

Dated: June 18, 2025

ALLEN MATKINS LECK GAMBLE MALLORY & NATSIS LLP

MICHAEL R. FARRELL

SCOTT J. LEIPZIG

TIM C. HSU

By:

/s/

Tim C. Hsu